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Example of a nudge: a housefly painted onto the ceramic of a urinal in a men's public toilet

The first formulation of the term and associated principles was developed in cybernetics by James Wilk before 1995 and described by Brunel University academic D. J. Stewart as "the art of the nudge" (sometimes referred to as micronudges[1]). It also drew on methodological influences from clinical psychotherapy tracing back to Gregory Bateson, including contributions from Milton Erickson, Watzlawick, Weakland and Fisch, and Bill O'Hanlon.[2] In this variant, the nudge is a microtargetted design geared towards a specific group of people, irrespective of the scale of intended intervention.

A nudge, as we will use the term, is any aspect of the choice architecture that alters people's behavior in a predictable way without forbidding any options or significantly changing their economic incentives. To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates. Putting fruit at eye level counts as a nudge. Banning junk food does not.

In this form, drawing on behavioral economics, the nudge is more generally applied to influence behaviour.

One of the most frequently cited examples of a nudge is the etching of the image of a housefly into the men's room urinals at Amsterdam's Schiphol Airport, which is intended to "improve the aim".[5]

A nudge makes it more likely that an individual will make a particular choice, or behave in a particular way, by altering the environment so that automatic cognitive processes are triggered to favour the desired outcome.[6][7]

An individual’s behaviour is not always in alignment with their intentions (termed a value-action gap).[8] It is common knowledge that humans are not fully rational beings; that is, people will often do something that is not in their own self interest, even when they are aware that their actions are not in their best interest.[9] As an example, when hungry, dieters often under-estimate their ability to lose weight, and their intentions to eat healthy can be temporarily weakened until they are satiated.[10]

Thaler and Sunstein[11] describe two distinct systems for processing information as to why people sometimes act against their own self-interest: System 1 is fast, automatic, and highly susceptible to environmental influences; System 2 processing is slow, reflective, and takes into account explicit goals and intentions.[6] When situations are overly complex or overwhelming for an individual’s cognitive capacity, or when an individual is faced with time-constraints or other pressures, System 1 processing takes over decision-making.[12][13] System 1 processing relies on various judgmental heuristics to make decisions, resulting in faster decisions.[14] Unfortunately, this can also lead to sub-optimal decisions. In fact, Thaler and Sunstein[15] trace maladaptive behaviour to situations in which System 1 processing over-rides an individual’s explicit values and goals.[16] It is well documented that habitual behaviour is resistant to change without a disruption to the environmental cues that trigger that behaviour.[17]

Nudging techniques aim to use judgmental heuristics to our advantage. In other words, a nudge alters the environment so that when heuristic, or System 1, decision-making is used, the resulting choice will be the most positive or desired outcome.[18] An example of such a nudge is switching the placement of junk food in a store, so that fruit and other healthy options are located next to the cash register, while junk food is relocated to another part of the store.[19]

Nudges are small changes in environment that are easy and inexpensive to implement.[6] Several different techniques exist for nudging, including defaults, social proof heuristics, and increasing the salience of the desired option.

A default option is the option an individual automatically receives if he or she does nothing. People are more likely to choose a particular option if it is the default option.[20] For example, Pichert & Katsikopoulos[21] found that a greater number of consumers chose the renewable energy option for electricity when it was offered as the default option.

A social proof heuristic refers to the tendency for individuals to look at the behavior of other people to help guide their own behavior. Studies have found some success in using social proof heuristics to nudge individuals to make healthier food choices.[22]

When an individual’s attention is drawn towards a particular option, that option will become more salient to the individual, and he or she will be more likely to choose to that option. As an example, in snack shops at train stations in the Netherlands, consumers purchased more fruit and healthy snack options when they were relocated next to the cash register.[23]

Leading Silicon Valley companies are forerunners in applying nudge theory in corporate setting. These companies are using nudges in various forms to increase productivity and happiness of employees. Recently, further companies are gaining interest in using what is called "nudge management" to improve the productivity of their white-collar workers.[30]

There are now more than 80 countries in which behavioral insights are used.[citation needed]

Nudging has also been criticised. Tammy Boyce, from public health foundation The King's Fund, has said: "We need to move away from short-term, politically motivated initiatives such as the 'nudging people' idea, which are not based on any good evidence and don't help people make long-term behaviour changes."[31]

Cass Sunstein has responded to critiques at length in his The Ethics of Influence[32] making the case in favor of nudging against charges that nudges diminish autonomy[33], threaten dignity, violate liberties, or reduce welfare. He further defended nudge theory in his Why Nudge?: The Politics of Libertarian Paternalism[34] by arguing that choice architecture is inevitable and that some form of paternalism cannot be avoided. Ethicists have debated nudge theory rigorously[35]. These charges have been made by various participants in the debate from Bovens[36] to Goodwin[37]. Wilkinson for example charges nudges for being manipulative, while others such as Yeung question their scientific credibility[38].

Some, such as Hausman & Welch[39] have inquired whether nudging should be permissible on grounds of (distributive[clarification needed]) justice; Lepenies & Malecka [40] have questioned whether nudges are compatible with the rule of law. Similarly, legal scholars have discussed the role of nudges and the law.[41][42]

Behavioral economists such as Bob Sugden have pointed out that the underlying normative benchmark of nudging is still homo economicus, despite the proponents' claim to the contrary.[43]

There exists an anticipation and, simultaneously, implicit criticism of the nudge theory in works of Hungarian social psychologists who emphasize the active participation in the nudge of its target (Ferenc Merei)[47], Laszlo Garai[48]).